Q: For some diversity on the US side of my portfolio, I added both ZLU and ZVU. It has now been roughly three years since I bought them and ZLU has averaged 12% including distributions while ZVU has averaged 1.5%. What do you think selling ZVU and adding to ZLU, or buying ZDY? The goal is to offset some of the volatility from my growthier US stocks which include many of the top names in the S&P 500 Index. Thank you.
5i Research Answer:
Value investing (ZVU) would have had a difficult time in the two big years of 2023 and 2024. But even this year ZVU has lagged. Meanwhile the low-vol ZLU has a solid 13.5% five-year annualized return. ZVU is quite small at $62M in assets and we would be fine switching to ZLU. We would also see ZDY as a suitable switch. It is a bit more aggressive but also has a better long term return. Both certainly look better than ZVU overall. But if seeking non-correlation, we would go back to ZLU over ZDY.